Farmers in the Indian state of Himachal Pradesh are hopeful the government’s move to allow increased foreign investment in the country’s retail sector will see improvements in the supply chain there.
The Business Standard reported the region's apple and stonefruit growers stood to benefit greatly from future investment in the country’s supply chain as major retailers look to tap into India’s huge retail market.
Prakash Thakur, the chairman of a prominent farmers body in the state, told the newspaper the government's ruling to allow 51 per cent FDI in multi-brand retail was being welcomed by growers who saw a significant portion of their crops go to waste because of an inadequate supply chain.
Foreign retailers will likely be subject to rules requiring they source almost a third of their supplies from small industries and invest a minimum of US$100m in the country, of which half must be invested in supply infrastructure.
“FDI is expected to roll out cool chains that will bring the market closer home, reduce the number of middle men and enhance returns to farmers,” said Thakur.
“Highly perishable fruit like cherry, apricots, peaches and plums, have huge demand but are unable to tap the market fully due to lack of a cool chain and transport infrastructure. All this should see a boost with the opening up of the retail sector for large investments through FDI,” Thakur added.
Despite investment from the government, Thakur said the establishment of an effective cool chain would only be possible with the capital investment and technological know-how of the big international retailers.
Just how easy it will be for retail giants such as Walmart, Carrefour and Tesco to bring about these changes, however, is yet to be seen.
